[Federal Register Volume 77, Number 66 (Thursday, April 5, 2012)]
[Notices]
[Pages 20633-20635]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-8192]


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FEDERAL MARITIME COMMISSION

[Docket No. 12-01]


OC International Freight, Inc., OMJ International Freight, Inc. 
and Omar Collado; Order for Hearing on Appeal of Denial of License and 
Order of Investigation and Hearing; Possible Violations of Sections 
10(A)(1) and 19 of the Shipping Act of 1984

I. Appeal of FMC Staff Determination to Deny OTI License

    OC International Freight, Inc. (OC) submitted an application on 
December 2, 2010, for a license as an Ocean Transportation Intermediary 
(OTI) to operate as a Non-Vessel-Operating Common Carrier (NVOCC) and 
as an Ocean Freight Forwarder (FF). OC was incorporated on February 27, 
2007 in the State of Florida, and OC is currently located at 4458 NW 
74th Avenue, Miami, FL, 33166. Omar Collado is identified in the 
application as OC's Qualifying Individual, as well as its President, 
Secretary and sole owner.
    On November 17, 2011, the Bureau of Certification and Licensing 
(BCL) issued a Notice of Intent to Deny OC's license

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application in accordance with 46 CFR 515.15. As reflected in BCL's 
Notice of Intent, that action stemmed from the results of an 
investigation by the Commission's Miami Area Representative (AR) 
revealing that the applicant, the applicant's Qualifying Individual and 
a predecessor corporation, OMJ International Freight, Inc.,\1\ may have 
violated sections 10(a)(1) and 19 of the Shipping Act, 46 U.S.C. 
41102(a), 40901-40902. BCL's letter advised that, under 46 CFR 515.15, 
denial of an OTI license is appropriate when the Commission cannot rely 
upon the character or integrity of the applicant, or its principals, to 
the extent necessary to ensure future conduct within the requirements 
of the Shipping Act and the Commission's regulations. Based on the AR's 
investigation, BCL concluded that OC, and its qualifying individual, 
Mr. Collado, lacked the requisite character to be licensed as an OTI. 
OC timely requested a hearing on the denial of its license application 
under 46 CFR 515.15(c).
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    \1\ OMJ International Freight, Inc. (OMJ) was incorporated on 
March 15, 1999, and was licensed as a freight forwarder and NVOCC on 
September 13, 2006. Omar Collado serves as the president, Qualifying 
Individual and sole owner of OMJ. OMJ's license was automatically 
revoked on January 15, 2010 following termination of its OTI bond by 
the surety company. See 46 CFR 515.26.
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II. Investigation of Possible Violations of the Shipping Act

    Central to the applicant's request for hearing here, Mr. Collado 
challenges whether he, OMJ and/or OC should be found to have violated 
the Shipping Act and the Commission's regulations. Specifically, the 
AR's investigation asserted that between October 2007 and October 2009, 
Mr. Collado and OMJ allowed its foreign-based unbonded OTI counterpart, 
Island Cargo Services, to utilize OMJ's service contracts in numerous 
instances. Although identified as the NVO on the underlying service 
contract with Seaboard Marine, the AR found that Mr. Collado did not 
issue an OMJ house bill of lading and never billed the cargo owner for 
ocean freight. Rather, Mr. Collado permitted Island Cargo Services to 
issue the latter company's house bill. Acting either as OMJ or OC,\2\ 
Mr. Collado allegedly provided only freight forwarding, warehousing, 
trucking and loading services for each of these shipments. On the basis 
of those facts, the Commission's Miami AR concluded that Mr. Collado, 
OMJ and OC knowingly and willfully violated section 10(a)(1) of the 
Shipping Act by allowing other persons to obtain ocean transportation 
for property at less than the applicable rates and charges through the 
device of permitting such persons to unlawfully access OMJ's service 
contracts.
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    \2\ During this same period, OMJ was dissolved as a Florida 
corporation, at which time Collado appears to have begun conducting 
business, in part, under the OC name, using OC letterhead. Neither 
the dissolution of OMJ (a licensed entity) nor the apparent license 
transfer from OMJ to OC was reported to BCL. 46 CFR 515.18.
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    For the period following revocation of OMJ's license for failure to 
maintain a bond on January 15, 2010, the Miami AR asserted also that 
Mr. Collado, OMJ and OC continued to provide ocean freight forwarder 
services at a time when they no longer possessed a valid OTI license or 
bond. The Miami AR concluded that Mr. Collado, OMJ and OC violated 
section 19 by acting as an unlicensed and unbonded OTI on more than 100 
occasions beginning on or after January 16, 2010 and continuing through 
at least October 26, 2010. At the conclusion of the AR's investigation, 
Mr. Collado requested settlement negotiations with the Commission's 
Bureau of Enforcement (BOE). However, negotiations with BOE terminated 
unsuccessfully.
    Section 19 of the Shipping Act of 1984, 46 U.S.C. 40901, provides 
that the Commission shall issue an OTI license only to persons that it 
determines to be qualified by experience and character. The 
Commission's regulations at 46 CFR 515.15 implement the standards for 
licensing under section 19, and state that:

    If the Commission determines, as a result of its investigation, 
that the applicant: (a) Does not possess the necessary experience or 
character to render intermediary services; (b) Has failed to respond 
to any lawful inquiry of the Commission; or (c) Has made any 
materially false or misleading statement to the Commission; then a 
letter of intent to deny the application shall be sent to the 
applicant * * *.

    The Commission's regulations thus require denial of an application 
for an OTI license if the applicant does not possess the necessary 
character to render OTI services. Based on a finding that the applicant 
did not possess the necessary character, BCL issued its determination 
on November 17, 2011 advising Mr. Collado of the intention to deny OC's 
application.
    Pursuant to Mr. Collado's request for hearing, the Commission must 
determine whether BCL's determination to deny the OTI license 
application should now be upheld. That decision is factually related to 
the alleged violations by Mr. Collado, OMJ and OC. Given the common set 
of facts relating to Mr. Collado's, OMJ's and OC's past (and current) 
OTI operations, findings upon which the Commission may both analyze 
BCL's denial of the OTI application and BOE's allegations of Shipping 
Act violations, a combined proceeding would provide an efficient 
process.
    Now therefore, it is ordered That, pursuant to sections 11 and 19 
of the Shipping Act of 1984, 46 U.S.C. 40901, 40902, 41302 and 41304, 
an adjudicatory proceeding is hereby instituted to determine:
    (1) Whether to affirm BCL's November 17, 2011 denial of the OTI 
application of OC International Freight, Inc. and Omar Collado;
    (2) Whether OC International Freight, Inc., OMJ International 
Freight, Inc. and/or Omar Collado violated Section 10(a)(1) of the 
Shipping Act, 46 U.S.C. 41102(a), by knowingly and willfully allowing 
other persons to obtain ocean transportation for property at less than 
the rates and charges that would otherwise be applicable through the 
device of permitting such persons to unlawfully access OMJ's service 
contracts;
    (3) Whether OC International Freight, Inc., OMJ International 
Freight, Inc. and/or Omar Collado violated section 19(a) and (b) of the 
Shipping Act, 46 U.S.C. 40901 and 40902, by acting as an ocean 
transportation intermediary without a license or evidence of financial 
responsibility;
    (4) Whether, in the event violations of sections 10 or 19 of the 
Shipping Act are found, civil penalties should be assessed against OC 
International Freight, Inc., OMJ International Freight, Inc. and/or 
Omar Collado, and, if so, the amount of penalties to be assessed; and
    (5) Whether, in the event violations are found, appropriate cease 
and desist orders should be issued.
    It is further ordered, That a public hearing be held in this 
proceeding and that this matter be assigned for hearing before an 
Administrative Law Judge of the Commission's Office of Administrative 
Law Judges in compliance with Rule 61 of the Commission's Rules of 
Practice and Procedure, 46 CFR 502.61. The hearing shall include oral 
testimony and cross-examination in the discretion of the Presiding 
Administrative Law Judge only after consideration has been given by the 
parties and the Presiding Administrative Law Judge to the use of 
alternative forms of dispute resolution, and upon a proper showing that 
there are genuine issues of material fact that cannot be resolved on 
the basis of sworn statements, affidavits, depositions, or other 
documents or that the nature of the matters in issue is such that an 
oral hearing and cross-examination are

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necessary for the development of an adequate record;
    It is further ordered That, OC International Freight, Inc., OMJ 
International Freight, Inc. and Omar Collado be made Respondents in 
this proceeding;
    It is further ordered That the Commission's Bureau of Enforcement 
be made a party to this proceeding;
    It is further ordered, That notice of this Order be published in 
the Federal Register, and a copy be served on parties of record;
    It is further ordered, That other persons having an interest in 
participating in this proceeding may file petitions for leave to 
intervene in accordance with Rule 72 of the Commission's Rules of 
Practice and Procedure, 46 CFR 502.72;
    It is further ordered, That all further notices, orders and/or 
decisions issued by or on behalf of the Commission in this proceeding, 
including notice of the time and place of hearing or prehearing 
conference, shall be served on all parties of record;
    It is further ordered, That all documents submitted by any party of 
record in this proceeding shall be directed to the Secretary, Federal 
Maritime Commission, Washington, DC 20573, in accordance with Rule 2 of 
the Commission's Rules of Practice and Procedure, 46 CFR 502.2, and 
shall be served on all parties of record; and
    It is further ordered, That in accordance with Rule 61 of the 
Commission's Rules of Practice and Procedure, the initial decision of 
the Administrative Law Judge shall be issued by April 2, 2013, and the 
final decision of the Commission shall be issued by July 31, 2013.

    By the Commission.
Karen V. Gregory,
Secretary.
[FR Doc. 2012-8192 Filed 4-4-12; 8:45 am]
BILLING CODE 6730-01-P